Sumitomo Mitsui Financial (US:SMFG) Xin Hua Cai Jing·2025-12-19 05:47Core Viewpoint - The depreciation of the Japanese yen is primarily driven by market expectations that "real negative interest rates will temporarily persist," which supports the profitability outlook for export-oriented companies and continues to boost the Japanese stock market [1][2] Group 1: Currency and Monetary Policy - The Bank of Japan's Governor, Kazuo Ueda, may need to adopt a "rather tough tone" in an upcoming press conference to curb further yen depreciation [1] - If the yen continues to weaken, the pace of interest rate hikes may become uncertain again, highlighting the complex situation facing Japan's monetary policy [1] - The current inflation pressures and fiscal sustainability require the central bank to consider raising interest rates, while an excessively strong yen could harm the export-driven economy, and an excessively weak yen could exacerbate imported inflation and undermine foreign investor confidence in Japanese government bonds [1] Group 2: Exchange Rate Trends - As of December 19, 2025, the USD/JPY exchange rate is approaching a historical low of 157:1 [1] - The Bank of Japan signaled a hawkish stance on December 1, indicating it would "consider the pros and cons of raising policy rates" during monetary policy meetings, leading to widespread expectations of an end to the three-decade era of ultra-low interest rates in Japan [1]